The first three procedures below can be used to assist a business rescue or turnaround. Liquidation is a terminal process for the company which can lead to the cessation of trade of the business. However, often a re-start option is possible to enable the business to survive.

In certain circumstances an informal recovery plan may be achievable which avoids the requirement for one of the formal processes detailed below. There is also a Members' Voluntary Liquidation which applies to solvent companies which, by definition, can pay their debts in full with interest. This procedure is useful if shareholders want to unlock their capital.

For advice and assistance regarding any aspect of the above insolvency procedures, please contact Lameys. We will discuss, free of charge, any further implications and alternatives with you.

Formal insolvency procedures require the appointment of licensed insolvency practitioner. Lameys are licensed insolvency practitioners and can accept such appointments.

In all circumstances taking advice early means more options will be available. Initial advice is always free and completely confidential.

Company Voluntary Arrangement (CVA)

A CVA is an opportunity to save your business. If a company has a viable future but is being hindered by a build-up of historic debt, a Company Voluntary Arrangement may be the answer.

A CVA is essentially a compromise between a company and its creditors whereby both achieve a better outcome than if the Company is wound up. A CVA will often involve creditors accepting part payment of their debt in full and final settlement and once approved, all creditors are legally bound by the terms of the Arrangement.

Administration

Administration prevents creditors from taking any legal action against a company. This provides breathing space and allows the administrator to formulate further proposals. Administration is sometimes used to provide protection for a company while a CVA proposal is formulated. Administration can be useful if:

Cash-flow pressure is critical but there is still a good core business.

The business can be sold but the company is insolvent.

Pre—Pack Administration

With a Pre-Pack Administration the sale of the business and its assets is “pre-packaged” prior to the administrator being appointed. The sale is then completed immediately after the administrator is appointed and there is a seamless transition of the business operation. The sale will typically include all the business, physical assets, goodwill, website, intellectual property etc.

Creditors' Voluntary Liquidation

If a company is insolvent and cannot pay all its debts it may be appropriate to liquidate. In a Creditors’ Voluntary Liquidation the directors of the company voluntarily commence the liquidation process. A Creditors Voluntary Liquidation is the most common way for directors and shareholders to deal with a company’s insolvency.

Business Re-Starts

A Business Restart is very similar to a Pre-Pack Administration. The main difference is timing. The process for a Business Re-Start is slower than in a Pre-Pack. The specific circumstances of the Company will dictate which procedure is appropriate for you.

Compulsory Liquidation

A Compulsory Liquidation is a Court-directed method of winding up a company. To wind a company up, a petition is presented to the court either by the company, its Directors, its shareholders or any creditors of the company owed £750 or more. In practice a Compulsory Liquidation is usually instigated by a creditor when they are trying to collect a debt.

Informal Business Recovery

Taking advice early can often mean a formal insolvency process can be avoided. Early intervention nearly always means more options. We have excellent relationships with funders and other specialists in the turnaround market and we can use those relationships to help you. Our experienced team can often help you to deal with matters informally. Examples of how we can help include:

Members Voluntary Liquidation (MVL)

A Members’ Voluntary Liquidation (or Solvent Liquidation) enables shareholders to put a solvent company into liquidation in order to unlock their capital. It can be used to secure an orderly winding up of a company or to close down a subsidiary (within a group of companies) that has outlived its usefulness.

Administrative Receivership

Administrative Receivers can only be appointed by secured creditors and is only available where the security documentation pre-dates 15 September 2003.